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Seniors hope for heftier Social Security checks

In this Feb. 11, 2005 file photo, trays of printed social security checks wait to be mailed from the U.S. Treasury's Financial Management services facility in Philadelphia. For the second straight year, millions of Social Security recipients can expect an historically small increase in benefits come January 2014. (AP Photo/Bradley C. Bower, File)

Published: Monday, October 14, 2013 at 4:23 p.m.

Last Modified: Monday, October 14, 2013 at 5:12 p.m.

Projections that Social Security will increase benefits by just 1.5 percent in 2013 are not going over well in Southwest Florida, a region with one of the largest concentrations of Social Security beneficiaries in the nation.

Despite low inflation, local seniors trying to get by on fixed incomes say their budgets are often strained by unexpected expenses and other financial issues.

And grumbling over the current Social Security cost-of-living adjustments could grow louder if Congress, in an effort to control costs, adopts an even stingier method for calculating increases.

Republicans are trying to tie cuts to entitlement programs such as Social Security to the current debate over ending the government shutdown and extending the U.S. Treasury's borrowing limit.

There are more than 200,000 Social Security beneficiaries in Florida's 16th congressional district, which covers Sarasota County and most of Manatee County. That is the second-most of any district in the country.

Sarasota retiree Maria Thompson relies primarily on $1,400 in monthly Social Security benefits to pay her bills, but that is not enough to cover the expensive dental surgery she needs.

So Thompson, 67, visited Sarasota's Senior Friendship Centers Monday to see if she qualified for assistance from the Centers' dental clinic.

"I don't know if it's fair but it will have to do," Thompson said of the meager Social Security boost.

Seniors getting squeezed

Social Security accounts for nearly 40 percent of all retirement income nationwide. Almost a quarter of married seniors and nearly half of single retirees count on Social Security for 90 percent of their income.

The average monthly benefit is $1,162. A 1.5 percent increase would boost that by $17 per month.

The exact size of the cost-of-living adjustment, or COLA, will not be known until the U.S. Labor Department releases the inflation report for September.

The COLA adjustment is usually announced in October, but the inflation report has been delayed indefinitely because of the government shutdown.

An Associated Press analysis released Monday calculated the COLA for 2013 at 1.5 percent based on inflation reports from earlier in the year and interviews with economists who said there were no big price increases in September.

A 1.5 percent increase would be one of the lowest on record. There have only been six times since 1975 when the Social Security increase was less than 2 percent, including this year, when the hike was 1.7 percent.

There was no COLA in 2010 or 2011 because inflation was too low.

AARP's David Certner said seniors are getting squeezed financially from many sides.

Retirement portfolios took a big hit when the markets collapsed a few years ago, and even though the markets have rebounded, safer investments favored by older Americans are paying relatively low interest rates.

"Social Security COLAs have been low and anybody who's trying to live off interest rates and getting returns on any of the meager savings they have is getting killed because there's no return on your CDs or other fixed income assets," Certner said. "The one bright spot is that health care costs have slowed down. But at least on the income side, it has been a pretty tough few years in terms of trying to keep up with expenses."

By law, the Social Security cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

Some Republicans are promoting a new "Chained CPI" system for calculating Social Security increases.

The new method would result in even smaller cost-of-living adjustments because it assumes people change their buying habits when the cost of a particular product gets too high.

The chained CPI would result in a $6.1 million hit to Southwest Florida's economy between now and 2020, according to a report by The National Committee to Preserve Social Security and Medicare Foundation.

Budgets already tight

Many Southwest Florida seniors say their budgets already are tight.

Siesta Key retiree Irene Engh receives $2,000 per month from Social Security — her only source of income — but half of that goes to pay her $462 monthly condo association fee, $3,000 in annual property taxes and the $295 monthly charge for a health insurance plan that supplements Medicare.

"You don't have too much left over," said Engh, 83.

Sarasota retiree Ed Neely knows a number of Senior Friendship Centers regulars who have applied for food stamp benefits from the federal government. Some also struggle with medical costs and other expenses.

"I feel sorry for a lot of these people," said Neely, 85, adding: "The dependence on Social Security is pretty heavy."

Thompson, the retired nurse, tries to be thrifty. She was setting aside money and doing "pretty good" financially until dental problems threatened to explode her budget. Living primarily on Social Security is a constant challenge.

"I know how to save my money," she said. "Otherwise I'd be in trouble."

<p>Projections that Social Security will increase benefits by just 1.5 percent in 2013 are not going over well in Southwest Florida, a region with one of the largest concentrations of Social Security beneficiaries in the nation.</p><p>Despite low inflation, local seniors trying to get by on fixed incomes say their budgets are often strained by unexpected expenses and other financial issues.</p><p>And grumbling over the current Social Security cost-of-living adjustments could grow louder if Congress, in an effort to control costs, adopts an even stingier method for calculating increases.</p><p>Republicans are trying to tie cuts to entitlement programs such as Social Security to the current debate over ending the government shutdown and extending the U.S. Treasury's borrowing limit.</p><p>There are more than 200,000 Social Security beneficiaries in Florida's 16th congressional district, which covers Sarasota County and most of Manatee County. That is the second-most of any district in the country.</p><p>Sarasota retiree Maria Thompson relies primarily on $1,400 in monthly Social Security benefits to pay her bills, but that is not enough to cover the expensive dental surgery she needs.</p><p>So Thompson, 67, visited Sarasota's Senior Friendship Centers Monday to see if she qualified for assistance from the Centers' dental clinic.</p><p>"I don't know if it's fair but it will have to do," Thompson said of the meager Social Security boost.</p><p><b>Seniors getting squeezed</b></p><p>Social Security accounts for nearly 40 percent of all retirement income nationwide. Almost a quarter of married seniors and nearly half of single retirees count on Social Security for 90 percent of their income.</p><p>The average monthly benefit is $1,162. A 1.5 percent increase would boost that by $17 per month.</p><p>The exact size of the cost-of-living adjustment, or COLA, will not be known until the U.S. Labor Department releases the inflation report for September.</p><p>The COLA adjustment is usually announced in October, but the inflation report has been delayed indefinitely because of the government shutdown.</p><p>An Associated Press analysis released Monday calculated the COLA for 2013 at 1.5 percent based on inflation reports from earlier in the year and interviews with economists who said there were no big price increases in September.</p><p>A 1.5 percent increase would be one of the lowest on record. There have only been six times since 1975 when the Social Security increase was less than 2 percent, including this year, when the hike was 1.7 percent.</p><p>There was no COLA in 2010 or 2011 because inflation was too low.</p><p>AARP's David Certner said seniors are getting squeezed financially from many sides.</p><p>Retirement portfolios took a big hit when the markets collapsed a few years ago, and even though the markets have rebounded, safer investments favored by older Americans are paying relatively low interest rates.</p><p>"Social Security COLAs have been low and anybody who's trying to live off interest rates and getting returns on any of the meager savings they have is getting killed because there's no return on your CDs or other fixed income assets," Certner said. "The one bright spot is that health care costs have slowed down. But at least on the income side, it has been a pretty tough few years in terms of trying to keep up with expenses."</p><p>By law, the Social Security cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.</p><p>Some Republicans are promoting a new "Chained CPI" system for calculating Social Security increases.</p><p>The new method would result in even smaller cost-of-living adjustments because it assumes people change their buying habits when the cost of a particular product gets too high.</p><p>The chained CPI would result in a $6.1 million hit to Southwest Florida's economy between now and 2020, according to a report by The National Committee to Preserve Social Security and Medicare Foundation.</p><p><b>Budgets already tight</b></p><p>Many Southwest Florida seniors say their budgets already are tight.</p><p>Siesta Key retiree Irene Engh receives $2,000 per month from Social Security — her only source of income — but half of that goes to pay her $462 monthly condo association fee, $3,000 in annual property taxes and the $295 monthly charge for a health insurance plan that supplements Medicare.</p><p>"You don't have too much left over," said Engh, 83.</p><p>Sarasota retiree Ed Neely knows a number of Senior Friendship Centers regulars who have applied for food stamp benefits from the federal government. Some also struggle with medical costs and other expenses.</p><p>"I feel sorry for a lot of these people," said Neely, 85, adding: "The dependence on Social Security is pretty heavy."</p><p>Thompson, the retired nurse, tries to be thrifty. She was setting aside money and doing "pretty good" financially until dental problems threatened to explode her budget. Living primarily on Social Security is a constant challenge. </p><p>"I know how to save my money," she said. "Otherwise I'd be in trouble."</p><p><i>Information from The Associated Press was used in this report.</i></p>